What Does Web 2.0 Mean to Enterprises?

In my previous post, "Every Organization Needs a Web 2.0 Story", I outlined some of the business reasons why Web 2.0 is important for organizations today. I also promised to further explain what exactly Web 2.0 can do for enterprises in future posts. This morning I had the pleasure of reading Gartner's new 2006 Emerging Technologies Hype Cycle which they released earlier today as well as Dion Hinchcliffe's insightful analysis (Dion artfully predicted a phased mainstream adoption of different "components" over the next many years: SaaS (1-3 years), Enterprise Mashups and WOA (2-4 years), etc). - I couldn't resist the temptation of adding my two cents.

The Role of Enterprise IT: Interaction and Integration

Instead of looking at web 2.0 from the perspective of the various Web 2.0 technologies, my own experience of working with many enterprise customers at Nexaweb taught me the critical importance of taking a business perspective. In a business context, the role that enterprise IT plays for an organization can be characterized in two words: interaction and integration.

Interaction: How do employees, customers, partners and suppliers interact with information (people-to-information)? How do employees, customers, partners and suppliers interact with each other (people to people interaction, or in other word, collaboration)? The value of IT is that it enables, facilitates and supports both kinds of interactions.

If you look at the history, we started with developing mainframe applications so that employees can interact with data to conduct business. Then we evolved into mini-computer, PC and web 1.0 – with each evolution, we enhanced the flexibility, productivity, efficiency and cost-effectiveness of people-to-information as well as people-to-people interaction. Web 2.0 as the next evolution of information technology is going to play the same role as previous evolutions along this path.

Integration: How do different IT systems work with each other? How can we leverage data as well as intelligence distributed as various places together to create higher level productivity?

Again, let’s look at the history. We started by writing “solo” applications that run on mainframe with little concern about “integration”. We evolved into personal computing that brought up a lot more applications and thus “integration” started to become a subject of concern for IT. Web 1.0 brought “integration” into the focal point due to the fact that a lot of web applications are really about combing various existing IT systems to a web interface. “Integration” itself has grown in importance significantly as well. According to Gartner, enterprise IT spent seven dollars on integrating existing systems for every dollar spent on developing new systems. Technically, integration evolved from hand coding piecemeal integration to EAI to SOA. What Web 2.0 brings to integration is a quantum step increase in lowering technological barriers and increasing productivity and efficiency.

What Does Web 2.0 Bring to Interaction and Integration?

Similar to every previous computing evolution (mainframe, PC, web 1.0), web 2.0 brings new possibilities to enterprise computing that will unleash a new wave of productivity increase and economic growth. More specifically, web 2.0 can dramatically simplify and enhance enterprise IT from both “Interaction” and “Integration” perspectives.

Interaction:

Web 2.0 technologies bring new possibilities to interaction while preserving all the web 1.0 virtues:

1. Rich user experience: Rich Internet Application (RIA) technologies based on Ajax and Java deliver a new generation of user experience for web applications. Leveraging web 2.0 technologies like Ajax and Mashups to deliver a rich user experience can translate directly into customer loyalty and increased revenue for customer-facing applications, enhanced productivity for employee applications, and reduced friction among suppliers and partners.
2. Empowered user self-service: Web 2.0 gives users power and the possibility to do a lot more on the web and be a lot more productivity without getting IT personnel or programmers to be involved. One example is to use web 2.0 technologies for call center consolidation.
3. Tacit collaboration: Web 2.0 brings collaboration into a new level. For example, “Wiki” gives non-technical users the capability to edit and modify pages in a collaborative fashion.

Integration: "Enterprise mashup” is a popular phrase in web 2.0. To me, it essentially means a much simpler, more cost-effective, self-service way of “integration”. “Integration” has evolved a lot over the last few years that web services become the de facto standard. Web Services brought a common, agile and flexible way of architecting enterprise applications that are ready for integration, but it still requires coding to integrate different systems together. “Mashups” significantly reduces the complexity and barrier for integration; To the degree that non technical user can theoretically perform the traditionally expensive and technically complex task of “integration” and build applications. Though still having ways to go (see Dion’s post “The quest for enterprise mashup tools”), enterprise mashup empowers millions of non programmers to actively participate and contribute to enterprise application development for the first time in history, potentially unleashing a new wave of productivity increase and economic growth that has not been seen before.

Business Opportunities and Success Stories of Leveraging Web 2.0 Today

Here I will outline some sample business opportunities enabled by Web 2.0 and some success examples. The list is not nor intended to be a comprehensive list by any means. The success stories are based on my knowledge of some Nexaweb customers (some of the names are not revealed). What is interesting is that you will see a set of examples that are distinctly different from the normal web 2.0 examples such as Flickr, HousingMap and GoogleMaps. The goal of this list is to help stimulate enterprise readers’ thinking.

1. Application modernization. Though the web has been with us for ten years, majority of business applications are still based on Client/Server or mainframe due to historical reasons. These applications are expensive to maintain and support due to their architectural limitations. The lack of robust support for rich user experience and complex functionality of web 1.0 have prevented such applications from leveraging the power of the Web. RIA technologies removed this barrier and it is possible to “modernize” these heavy and expensive desktop applications to the web now. Further, various integration initiatives as well as adoption of SOA make “application modernization” a natural next step.

Sungard (www.sungard.com) is a global leader in software and processing solutions for financial services, higher education and the public sector with over $4 billion in revenue. They have had great success in leveraging web 2.0 technologies to modernize their mission critical business applications. See some more details here.

2. Call center consolidation. Call center is an area that is ripe for web 2.0 solutions. Most call centers run on heavy desktop applications that require features and functionality beyond what web 1.0 can deliver.Web 2.0 not only makes it possible to run such applications over the web, but also makes it possible for end user self service, thus dramatically reducing call volumes.

A major beverage company runs seven call centers distributed over the country, with a few hundred call center agents and thousands of service men to service over two million vending machines. The call center application was based on PowerBuilder. They migrated the application to be based on Web 2.0 technologies, as a result, enabling the consolidation of call centers from 7 to 2.

3. Financial exchange.

Staring from 2004, one of the top five banks over the world created a strategic initiative to offer sophisticated currency trading service to customers over the web. By leveraging Web 2.0 technologies, their Foreign Exchange (Forex) application is accessible anywhere from a standard browser while delivering the rich user experience of a typical trading desk. The application contains over 1,000 screens and integrates with over 120 back end systems. It is used by over 10000 corporate customers over the Web, significantly increased customer satisfaction as well as reducing call center volume by 70%.

4. Field service applications:

Field service is an area that has been waiting for web 2.0 technologies for years. It requires not only rich user experience, performance and high functionality, but also the capability to deal with network interruptions. Aflac deployed an insurance agent application based on Web 2.0 technology, used by over 10000 agents. Here is a quote from Aflac:

“We selected Nexaweb’s product suite to build a Web-based platform using Java for our renewing ‘Insurance Premium Calculation System,’ which is used by more than 10,000 domestic insurance agents,” commented Aflac Japan, “Not only are our agents able to quickly leverage in-depth, integrated services deployed on Nexaweb’s unified platform, but they are also able to maintain productivity in the field, while occasionally-connected to the Internet or even offline.”

Another example is Simens (see details here http://www.adtmag.com/article.aspx?id=10677&page=), who uses web 2.0 for a very large and complex, Web-based application for its worldwide sales and engineering staff.

Where Do We Go From Here?

I believe enterprise web 2.0 is a major evolution in the computing industry whose impact is going to be as significant as all previous shifts. The timing to investigate and adopt Web 2.0 is today, not a few years later, if you are looking for ways to increase revenue, reduce costs, and leapfrog competitors. What do you think? I can be reached at cwei at nexaweb dot com or http://www.coachwei.com. Feedback and comments are very welcome.